ISLAMABAD: A major decline has been observed in the registration of vehicles in the federal capital in the current financial year, the interior minister told Senate on Friday.

Replying to a question raised by Senator Danesh Kumar about the decrease in the revenue collection by Excise and Taxation Department in the last three years, the interior minister said a major decline had been observed in registration of vehicles in the current year due to various reasons, including a ban on import of vehicles, non-assembling of vehicles locally and finical instability in the country.

Besides, a hike in prices of locally manufactured vehicles and non-uniform policy of FBR on application of advance tax at the time of registration of vehicles also led to the decline.

The minister said tax on vehicles below 1000cc was implemented through Finance Act 2019 by amending section 3 of West Pakistan Motor Vehicle Taxation Act 1959 by the federal government.

After the implementation of the amendment and incorporation of the lifetime token tax, he added, tax on about 90 per cent of vehicles having engine capacity below 1000cc had been recovered.

So far, 803 real estate agents and motor vehicle dealers have been registered by the department.

An amount of Rs10,000 (security fee one time), registration fee (Rs2,000) and annual renewal fee Rs600 is being charged by the department.

Therefore, the set target could not be achieved by the department due to less annual renewal fee - Rs600.

The Islamabad Excise and Taxation Department is being authorised to collect professional tax under the West Pakistan Finance Act 1964.

Professional tax is being collected by the Excise and Taxation Department from the urban areas whereas in the rural areas of the capital the tax is either collected by the MCI or union councils under the local government department. Therefore, the set target could not be achieved.

The Islamabad Excise and Taxation Department collected Rs18,941 million in the fiscal year 2021-22 under different heads, including registration fee, road tax, from real estate and motor vehicle dealers, professional tax, hotel tax, excise recovery and FBR recovery followed by Rs15,403 million in 2022-23 and Rs17,827 in 2023-24.

Published in Dawn, January 18th, 2025